4 Peak Demand Reduction Strategies

Due to the complexity of energy pricing, two identical buildings can consume the same amount of energy and have profoundly different utility bills. Demand charges are a reality for every building but with the right data it is possible to identify and solve the issues that cause high peak demand and expensive utility bills.

Scheduling – Peak Distribution

The most common contributor to high peak demand is multiple energy intensive processes running at the same time. A common example of this is when multiple rooftop cooling units power on all at once to provide cooling to a conditioned space. The solution to this problem is to schedule these systems to run at off peak hours, and to cycle different pieces of equipment so that all of the equipment is never on at the same time. The can be done through an existing building automation system, or through onboard controls. Having all cooling units running simultaneously is the quickest way to bring a space to the desired temperature, but with proper schedule analysis and control optimization, more cost effective means of cooling can be achieved. These control systems cycle cooling units so that the indoor air temperature is maintained at a comfortable level while allowing the system to use less energy during on-peak time intervals. This effectively distributes the amount of energy used over larger period of time, creating a load leveling effect and reducing peak demand.

For example, imagine 4 rooftop condensing units which provide cooling to four different zones within a building. If each unit is rated to consume 25 kW at full load, having them on simultaneously for one hour and sitting idle for one hour would result in an energy consumption of 100 kWh and a peak demand of 100 kW. If a building operator could identify this pattern, the operator could then implement a control strategy which only allows two of the four units to run simultaneously. With this system of controls, the energy charge would still be 100 kWh, but the peak demand during this two hour period would only be 50 kW. Using schedule analysis tools to optimize operation for maximum peak demand savings is the best way implement this strategy.

There are many examples of effective scheduling for peak demand reduction. At businesses where all of the employees come back from break times at the same time, breaks can be staggered to prevent all of the equipment in the building from being started at the same time. In high-rise residential buildings with hundreds of units, allowing residents to set their thermostats while also scheduling how many outdoor cooling units can run simultaneously can reduce peak demand. Dynamic HVAC optimization scheduling programs can take into account the forecasted weather for the day and condition the building during off-peak hours to reduce peak demand. Ensuring that cooling equipment is properly sized will allow the units to run more uniformly at full capacity rather than having oversized equipment cools very fast, runs in short bursts, and has higher peaks of power demand. Scheduling all of the electric baseboard space heaters in common areas to turn off during anticipated on peak hours will reduce the peak demand for power. Ensuring that high demand equipment is not running simultaneously will save on peak demand charges.

Capital Projects – Peak Shrinking

Another way to reduce peak demand is to install equipment that uses less energy. Using more efficient equipment reduces the base load of energy used at all times, effectively shrinking the entire demand curve in a downward direction.

Imagine that a building draws 1000 kW during the instance of peak demand, and 50 kW of that power was being consumed by inefficient linear fluorescent lighting. The building operator could replace the existing lighting system with a system of LED panels, bringing the lighting load down to 25 kW. This would then reduce the peak demand load down to 975 kW. Installing energy efficient equipment is an attractive peak demand reduction strategy that saves energy and power. These types of capital projects can represent a large part of the annual budget, and take time to plan and implement.

Storage – Peak Shaving

Energy storage provides another option for reducing peak demand. During times of low energy consumption, batteries are charged with energy from the grid. During times of high energy consumption when peak demand is likely to occur, some of the electrical energy needed within the facility is drawn from batteries, effectively reducing the amount of power taken from the grid and reducing peak demand. This is a costly option, and can be best implemented as part of a photovoltaic solar array, or in some cases a power factor correction strategy. This same energy storage principle can be applied to cooling. Some buildings use chillers to create ice at night during off-peak hours. The ice is a form of thermal energy storage, and is used later on during the day to provide cooling to the building.

Alternative Energy – Peak Shaving

One often overlooked benefit of generating your own energy is that it helps to reduce peak demand charges from the utility. Using forms of alternative energy, e.g. solar panels, to generate a portion of the total energy needed is a great way to reduce the power draw from the grid. If a building has peak demand event where the power drawn is 100 kW, the building operator could install a 25 kW solar array to effectively reduce the demand from the grid to 75 kW. Solar also adds the benefit of saving energy throughout the day and reducing the amount of solar radiation which can penetrate the building’s roof and add heat into the building. This is an expensive option, and can be a considerable long term investment.

The Bottom Line

Building operators are aware of peak demand and its impacts on utility bills, but implementing a peak demand reduction strategy can be challenging. Knowing what to target and when to target it is the first step in reducing peak demand. For obvious reasons, utility companies do not put electric meters at every wall outlet within a building. Energy is monitored as the total amount of electricity that comes into the building, making it very hard to draw conclusions from a utility bill alone. As buildings increase in complexity, understanding what is running, when it is running, and why it is running is nearly impossible without the right tools. These days, operators can use a building monitoring system to evaluate the operational characteristics of systems and to implement control strategies that make sense.

Every business and building has a unique load profile; one peak demand reduction plan will not apply to all businesses. When it comes to developing an effective peak demand reduction strategy, the more granular and equipment-specific the energy consumption data is, the better.

Solving peak demand issues is an impossible task without real-time data, forecasting, and energy visualizations. Real-time monitoring of equipment can help you identify a peak demand issue before it shows up on your bill.

To begin tackling peak demand issues it is important to have a good understanding of what peak demand is and the difference between energy and power. Need a quick crash course on peak demand, how power is related to energy, and why utilities charge for peak demand? Check out this FAQ.

Jeff Gorrie is an energy efficiency professional who lives in Des Moines, Iowa. He has a bachelor’s degree in mechanical engineering from Iowa State University. Jeff works at a national energy efficiency consulting firm and has completed over 1,000 commercial energy assessments. Jeff is certified as an Energy Manager (CEM), Building Analyst (BPI BA), and Envelope Professional (BPI ENV).